Despite the plunge in oil prices driving down the price of diesel, filling up trucks with compressed natural gas remains competitive, according to fuel industry watchers.
Jon T. Gabrielsen, president and CEO of Atlanta-based J.T. Gabrielsen Consulting LLC, says compressed natural gas (CNG) is an “unsung opportunity.”
Gabrielsen, author of a report, “Alternatively Powered Commercial Vehicles: Global Markets,” just published by BCC Research, says that even as diesel prices fell and stayed low, CNG has stayed somewhat competitive for fleets that fuel by compression gas with their own equipment.
As reported by Heavy Duty Trucking, the 350-page report discusses10 major alternative fuels for commercial vehicles used in North America, Latin America, Europe, the Middle East and Africa (EMEA), and the Asia-Pacific region. The fuels covered include CNG, LNG, LPG, DME, and Biodiesel.
Retail CNG at truck stops became less competitive at the lowest of oil and diesel prices, said Gabrielsen, although he predicted that segment will “return to competitiveness the soonest, at the lower oil/diesel prices than for most other alternative fuels.”
Per Gabrielsen’s analysis, depending on a wide range of variables, such as annual driving distances and the additional initial vehicle costs to outfit for on-board CNG fuel storage and engine use of natural gas, the “added cost per diesel gallon equivalent (DGE) of CNG fuel is $0.36-0.48/DGE for a 3-year payback.
“So conservatively,” he stated, “any time that one can fuel a commercial vehicle with CNG for at least 50 cents per DGE less than with diesel fuel, then one will have at least a 3-year or shorter payback by having equipped [trucks] for CNG instead of diesel.”
Gabrielsen added that “even at the current low oil and diesel prices, self-compressed CNG provides very significant savings for commercial fleets. Even if one must purchase half of the annual CNG usage remotely at truck stop prices for CNG, one will still achieve a 3-year payback.”